CompoSecure (CMPO) in Upslope 2024 Q3

Transformative Deal and Market Leadership

Apr 14, 2025

Summary

Leading producer of premium metal credit cards with a dominant market share in the U.S.
Recently announced a transformative transaction with David Cote, enhancing strategic and financial positioning.
Shares traded at a discount due to SPAC stigma and customer concentration risk.
Post-transaction, shares have re-rated but remain reasonably valued at 12x EPS.
Key risks include cyclical end markets, strategic changes, and customer concentration.

CompoSecure (CMPO, Financial) was featured in the Upslope 2024 Q3 fund letter as a new long position, underscoring its market leadership in premium metal credit cards and the strategic impact of a recent transformative transaction. The involvement of David Cote is expected to streamline operations and open avenues for growth.

"Upslope effectively purchased shares for 9x EPS shortly after the transaction was announced, with a simple thesis that the deal was very clearly transformative – eliminating or mitigating most of the prior perceived issues and creating significant optionality via Cote’s involvement." — Upslope 2024 Q3 Fund Letter

Read full letter at gurufocus Upslope 2024 Q3 page.

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